Key Takeaways
- Ripple buys back $200 million shares and sees its valuation reach $15 billion.
- Making the announcement, Brad Garlinghouse, CEO of Ripple, says that 2022 will be massive for the company.
- Market sentiment about the move remains mixed.
Ripple, the crypto company behind XRP, recently bought back its shares from Tetragon Financial Group. The move closes the long-standing dispute between the two firms that began after the SEC brought a lawsuit against Ripple in 2020, accusing the fintech company of selling unregistered securities in the form of XRP tokens. The shares buyback has hiked Ripple’s valuation to over $15 billion. However, several interpretations of the implication of the buyback have now emerged in the market.
Ripple CEO Brad Garlinghouse announces shares buyback with an optimistic outlook
In a series of tweets, CEO Brad Garlinghouse announced that the firm completed the buyback of shares it sold to Tetragon Financial Group. Garlinghouse adds that the buyback has raised the valuation of Ripple to $15 billion.
“Excited to announce Ripple bought back our Series C (Dec 2019) shares at a $15B valuation!” Garlinghouse said.
He proceeds to outline why Ripple was set to get bigger than it has ever been in 2022. Garlinghouse notes that despite tough times the company faced in 2021, Ripple recorded its best year yet financially as it was able to accumulate a $1 billion war chest.
“2022 – ‘slow down’ is not in our vocabulary. Even with 2021’s headwinds, it was our best year on record, and Ripple’s financial position ($1B in the bank) is the strongest we’ve ever been,” he quipped.
Regardless of the battle with the SEC, Ripple was able to enter several partnerships with international banks to provide cross-border payment services, bringing crypto native services to the traditional financial institutions. Garlinghouse noted that RippleNet currently handles a volume rate greater than $10 billion for its clients. He also notes that RippleX, its open-source payments network, was seeing new capabilities being added to the XRP Ledger including NFTs, CBDCs, interoperability bridges, and sidechains.
Garlinghouse’s announcement has been met with split sentiments
While Garlinghouse’s proclamation bears a lot of positivity, the minds of market participants have not been completely put at peace due to the circumstances surrounding the dispute with Tetragon. In December 2019, Ripple raised $200 million in a Series C funding round with the UK-based investment firm and joined by SBI Holdings and Route 66 Ventures. Shortly after this, the SEC filed its lawsuit against Ripple, declaring XRP to be a security.
Seeing the SEC’s move, Tetragon sued Ripple as well to try and reclaim its funds. They lost the case to Ripple however as the case with the SEC hasn’t been concluded. Based on this, market sentiment is split on what Ripple buying back the shares could mean for the ongoing SEC case as summed up by Fox Business’ Charles Gasparino.
He notes that on one hand, some market participants think that the move is bullish and indicates that Ripple will soon prevail in the case with the SEC. When this happens, Ripple plans to go public with an IPO hence the shares buyback. On the other hand, some market observers think that the move is to “limit liability in case of a loss.”
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